banks will underwrite using credit cashflow. meaning the cashflow is historical and performing. When you start a business, your numbers are theoretical. You may know there will be cashflow, however, you cannot guarantee it. Actually you can guarantee it, with a savings account tied the bank to repay back the money you borrowed within a time frame - so for borrowers starting a business, a bank will require a reserve account and base it off the amount you have, your credit score, and other variables to gauge your creditworthiness. What you believe, is not what is objectively and guaranteed to be obtained for the bank's risk.
Jul 28, 2011